Are you better off selling a home on your own?

One of the big criticisms of discount real estate brokerage services like Redfin is that home sellers who use them may be leaving money on the table because a traditional agent knows the market and intricacies of pricing a home. That was the argument made by Seattle real estate agent Deborah Arends in the controversial “60 Minutes” piece last month.

But The New York Times today digs into that issue by reporting on a study from economists at Northwestern University and The University of Wisconsin that found that people who sold their homes on their own actually did better financially when a 5 percent or 6 percent agent’s commission is factored in.

The 33-page study (which can be downloaded here in a PDF) ran from 1998 to 2004 in Madison, Wis., with the researchers cautioning that it might not apply nationwide and the data may be skewed due to the housing market bubble. The Times reports:

“The findings fly in the face of studies by the National Association of Realtors. The group has said that houses sold via its members’ local multiple listing services get a 16 percent premium over homes sold by their owners. The economists’ study is likely to be seen as ammunition for critics and lower-cost competitors who question the need for 5 or 6 percent commissions — which deliver about $60 billion a year to agents and their employers.”

Earlier this year, Redfin — a Seattle discount broker backed by Madrona Venture Group, Vulcan Capital and others — tried to make the case that it could help home buyers save money. In a report titled The Redfin Advantage, the company said that customers in King County paid 99.3 percent of the listing price of homes, while buyers with other brokerages paid 100.2 percent.

Of course, the debate continues to rage on whether For Sale By Owner or discount models like Redfin can actually save people money. The Times story points to 2005 research from the National Association of Realtors that says people who used a real estate agent to sell their home paid a median price of $230,000, versus $198,200 for those who go it alone.